Marcellus shale drilling has recently become an integral part of Western Pennsylvania’s economy, but unfortunately, the climate for Marcellus shale drilling is about to get a lot more confusing. A 2011 study conducted by researchers at Penn State University, found that Marcellus shale drilling related development accounted for $11.2 billion in “value added” to Pennsylvania’s economy, most of it in Western Pennsylvania. The report reached the “value added” amount by accounting for both the direct and indirect economic impact of the development.

However, both present and future Marcellus drilling leases may be threatened by a case pending in the Susquehanna County Common Pleas Court. The case started when John and Mary Butler filed a complaint to quiet title on their property in Susquehanna County. The Butlers held a deed on forty-four acres of land which contained an exception reserving: “[O]ne half the minerals and Petroleum Oils to said Charles Powers his heirs and assigns.” Charles Roger’s estate argues that this exception is a valid “mineral reservation” that should include Marcellus Shale. The court disagreed and held for the Butlers.

The Common Pleas Court based its holding on the definition of “minerals” established by the 1882 case, Dunham v. Kirkpatrick. That case held that when a “mineral reservation” does not specifically mention natural gas or oil, the court should presume that it was not intended to include them. Although a “mineral reservation” can include natural gas and oil, the Dunham rule requires that the person trying to assert the reservation must show evidence that the person who made the reservation meant to include them.

Not wanting to lose their valuable claim to the Marcellus shale on the Butler’s property, members of Charles Roger’s estate appealed to the Pennsylvania Superior Court. The Superior Court held that Pennsylvania law was unclear as to whether Marcellus shale is a mineral, and remanded to the Susquehanna County Common Pleas Court to decide. No matter how the Common Pleas Court rules, its decision will certainly be appealed back to the Pennsylvania Superior Court and perhaps to the Pennsylvania Supreme Court. Accordingly, there may be some period of time until clarity is obtained as to who owns the rights to Marcellus shale under a “mineral reservation.” If the courts overturn over one hundred years of legal precedent by finding Marcellus shale to be a mineral, drilling contracts all over Pennsylvania will be thrown into doubt.